Good afternoon, and welcome to the third quarter 2017 earnings discussion for PennyMac Mortgage Investment Trust. The slides that accompany this discussion are available from PennyMac Mortgage Investment Trust’s website at www.PennyMac-REIT.com. Before we begin, please take a few moments to read the disclaimer on slide two of the presentation. Thank you. Now I’d like to turn the discussion over to Stan Kurland, PMT’s Executive Chairman

Thank you, Chris. Let’s begin with Slide 3. For the third quarter, PMT reported net income attributable to common shareholders of $13.3 million on net investment income of $75.8 million, or $0.20 per diluted share, representing an annualized return on average common equity of 4%. PMT paid a dividend of $0.47 per share for the quarter, and book value per common share decreased to $19.74 at quarter end, from $20.04 cents at June 30. PMT’s results reflect distressed loan investment losses and a lower than expected contribution from GSE credit risk transfer investments due to credit spread widening, which we believe is partially attributable to the recent natural disasters. PMT reports results through four segments: Credit Sensitive Strategies, which generated $13.1 million in pretax income; Interest Rate Sensitive Strategies, which earned $13.3 million in pretax income; Correspondent Production, which earned $8.3 million in pretax income; and Corporate, with a pretax loss of $10.5 million. During the third quarter, we continued to grow our investments in CRT and mortgage servicing rights resulting from PMT’s correspondent production activities. Conventional correspondent loan production totaled $6.5 billion in unpaid principal balance, up 10% from the prior quarter. CRT eligible deliveries totaled $4.1 billion in UPB, which will result in approximately $144 million of new CRT investments once the aggregation period is complete. We also added $83 million in new MSR investments resulting from our correspondent activities. Also, we repurchased approximately $1 million PMT common shares from August 29 to October 4 at a cost of $16.9 million. Turning to Slide 4, let’s continue our review of the highlights. We continued to reduce equity allocated to distressed mortgage loans to 29% of total equity, down from 42% a year ago. We completed the previously announced sale of $145 million in UPB of performing loans from…

Thank you, Stan. Let’s turn to Slide 11 and discuss the resolution activity on PMT’s distressed whole loan investments in the third quarter. Here we show the five quarter trend for distressed loan resolutions, including liquidation and modification activities, which totaled $185 million in UPB during the quarter. As a percentage of the average nonperforming loan and REO balances, quarterly resolution activity represented 18% in the third quarter, unchanged from the prior quarter and up from 14% in the third quarter of 2016. Modifications totaled $89 million in UPB and comprised 48% of total resolution activity, compared with 50% in the prior quarter. Of these, streamlined modifications totaled $77 million in UPB, down from $88 million in the prior quarter. Liquidation activities comprised 49% of total resolutions, or $90 million in UPB, down from 48% of total resolutions, or $98 million in UPB, in the prior quarter. Liquidation activities include payoffs, foreclosure sales to third-parties, short sales and sales of REO properties to third-parties. REO sales comprised 34% of total resolution activity, up from 30% in the prior quarter. We continued to make progress in resolving the foreclosure pipeline, with the carrying value of REO inventory declining to $185 million at September 30, down from $207 million at June 30. New REO rentals were$ 6 million for the quarter, down from $7 million in the prior quarter. Now, let’s turn to slide 12 for a look at our correspondent production highlights. Correspondent acquisitions by PMT in the third quarter totaled $17.4 billion in UPB, up 7% from the second quarter and down 8% year-over-year. Conventional conforming acquisitions, for which PennyMac Financial performed fulfillment services for PMT, totaled $6.5 billion in UPB in the third quarter, up 10% from the prior quarter, while down 10% from the third quarter of 2016.…

Thank you, David. On Slide 16, we show the pretax income contributions from each of PMT’s operating segments over the last five quarters. As Stan noted earlier, we report results in four segments which reflect the evolution of PMT’s activities and the strategies that drive its financial results. PMT’s pretax income in the third quarter totaled $24.2 million, with the breakdown by segment as noted on the slide. Now let’s turn to Slide 17 and review the results of the Credit Sensitive Strategies segment. The Credit Sensitive Strategies segment includes results from PMT’s distressed mortgage loans, CRT, non-Agency subordinate bonds and commercial real estate investments. Segment revenues totaled $20.5 million, a decrease of 49% from the prior quarter. Lower revenue was primarily driven by a significant decrease in net gain on investments. Net gain on investments in the third quarter was $18.6 million, down 46% from the prior quarter, primarily driven by a 54% decline in gains on CRT due to spread widening during the quarter. Net interest income for Credit Sensitive Strategies was $2.9 million, down 59% from the prior quarter. Interest income was $16 million, a 23% decrease from the prior quarter, due primarily to the sale of performing loans and a decrease in capitalized interest from loan modifications. Interest income included $7 million of capitalized interest from loan modifications, down from $10.8 million in the prior quarter. Capitalized interest increases interest income and reduces loan valuation gains. Interest expense decreased 5% from the prior quarter to $13.1 million, driven by ongoing reductions in the distressed mortgage loan and REO portfolios. Other investment losses were $935,000, compared with losses of $1.1 million in the prior quarter. Segment expenses were $7.5 million in the third quarter, a 23% decrease from the prior quarter, resulting from a reduction in professional…

Thank you, Andy. PMT continues to make solid progress transitioning from distressed loans and into correspondent related investments such as credit risk transfer and mortgage servicing rights. We are focused on specific initiatives in our correspondent business that we expect to deliver higher production volumes, as well as optimized financing that should improve earnings from our correspondent production. We also are deploying more capital into the higher returning CRT and MSR strategies. In addition, we have raised capital that is not yet earning its full potential. Taking all of these initiatives together, we believe PMT’s strategies will generate improved earnings that are more consistent with our current quarterly dividend on common stock. Lastly, we encourage investors with any questions to reach out to our Investor Relations team by email or phone. Thank you. End of Q&A: This concludes PennyMac Mortgage Investment Trust’s third quarter earnings discussion. For any questions, please visit our website at www.pennymac-reit.com, or call our Investor Relations department at 818-224-7028. Thank you.